​While not officially confirmed by the South Korean government, it has been said that the US has granted Samsung Electronics (005930.KS) and SK Hynix (000660.KS) a one-year extension to the US export rules on semiconductor equipment that were put into effect last October.  The rule, which would have tacitly included fabs situated in China but owned and run by both South Korean companies, would have prevented both from expanding or upgrading existing facilities, making them non-competitive with Japanese, Taiwanese, and other Chinese fabs that might find local sources for certain equipment.  We expect official announcements will be made once the current grace period ends at the end of September.

The holy grail in the OLED material space is phosphorescent blue emitter material, with the reason being that in current RGB OLED displays (all OLED smartphones and IT devices but not OLED TVs) the OLED stack is comprised of a Red phosphorescent emitter, a green phosphorescent emitter, and a blue fluorescent emitter.  The nuance between phosphorescent and fluorescent is a big one in the OLED material space as broadly, fluorescent materials generate less light per unit of energy than phosphorescent ones.  By converting the blue fluorescent emitter material currently used in most OLED stacks, to a phosphorescent one, the amount of power consumed by the emitter stack could be reduced by ~25%, an important point for mobile devices, and with numerous labs and companies working toward the commercialization of a blue phosphorescent emitter, the long-term stakes are high.
It seems that the average investor believes that when blue phosphorescent emitter material is commercialized, the winner of the race, whoever that might be, is due to see a windfall in terms of OLED material sales, but while we believe that is the case over time, we are less sanguine about an immediate and significant jump in revenue from blue phosphorescent sales, as both physics and marketing must be figured into such equations. 
There are two factors that come into play when planning OLED pixels.  First is the efficiency of the materials, or their ability to convert electrical energy into light, and the 2nd is the eye’s sensitivity to each color.  If we assume the efficiency of both red and green phosphorescent emitter materials is the same (its not), for both colors to look equally bright to the huma eye, the pixel would contain two times the amount of red material to green material, but in practice that ratio is closer to 2 (red) to 3 (green), and again assuming the same efficiency for blue phosphorescent material, the theoretical ratio for blue would be only 16.3% of red, or 33% of green. So if red emitter cost $1,000 per kilogram (arbitrary price), the theoretical cost of a display that used 1 gram of red emitter would be $1.67, consisting of $1.00 of red, $0.50 of green, and $0.17 of blue, remembering that these are theoretical not practical ratios.
Back to reality, just by looking at a common pentile pixel layout, those ratios are not even close, especially as the efficiency of fluorescent blue (currently used) is considerably lower than that of (hopefully) phosphorescent blue, so ‘more’ fluorescent blue is needed currently to make up for that inefficiency, which leads to the idea that if fluorescent blue is replaced by a more efficient phosphorescent blue emitter, wouldn’t that mean that less blue is needed?  If all were of equal efficiency, yes, but that is certainly not the case with OLED materials. 
OLED material developers must find a balance between three major factors.  Color point (such as deep blue, not sky blue), efficiency, the ability to convert energy applied to light, and lifetime, or how long it takes for the material to degrade to a set point.  Finding a true deep blue phosphorescent material is not an impossible task, but finding one that has a reasonable efficiency is much harder, and finding one that is deep blue, with a high efficiency, but does not degrade in a few hours is very difficult, so material scientists continue to wrestle with materials until the right combination is found.  Even at that point however, we don’t know what the efficiency of this new blue phosphorescent material will be, and that will be a determinant in how much blue phosphorescent emitter material is needed to balance existing red and green phosphorescent emitter materials, which will also determine how much blue phosphorescent emitter material an OLED panel producer must buy when incorporating it in a new OLED display, so the variables are truly ‘variable’.
With all of those physical issues, there is another one as important, and that is the manufacturing cost of this new blue material.  Again, in theory, the amount of heavy metal, in this case iridium, needed to produce the increasingly higher energy levels of green and blue emitters, would make a phosphorescent blue emitter more expensive to produce than green or red, and under the assumption that the cost of raw materials for emitters is ~40%, this does represent a bit of an incremental cost, along with a relatively immature manufacturing process and considerable R&D that needs to be amortized, so the price/kg of a blue phosphorescent emitter is going to have to be higher than red or green.
That said, while the cost of a blue phosphorescent emitter material will be higher than that of a fluorescent blue emitter, less will be needed (in theory) unless the efficiency is low, which will make the changeover less onerous from a total OLED stack cost.  However it is important to understand that the adoption of a blue phosphorescent emitter material will not happen overnight, just as the adoption of a green phosphorescent material took time, as shown below.  While we expect the idea of being able to reduce power consumption by 25% or have an OLED display that is brighter than is currently possible, will be an attraction to OLED panel producers, but implementing new OLED materials into existing manufacturing processes takes time and considerable effort, and could affect yield for an extended period of time.  Typically such a change would be implemented on a single line, so once the new materials are proven, they would be expanded across other lines over time.
All in, while it will be exciting to see a commercial blue phosphorescent emitter material to complete the OLED stack, we hesitate to build in the high early expectations that are typical in the OLED space and take a more conservative view of how such a new material will be adopted.  With Universal Display (OLED) expected to have an all-phosphorescent stack commercially available next year, expectations will be high, but we expect adoption to the levels seen for current red and green phosphorescent emitter materials will take some time and investors should be wary of building in high expectations at the onset.

China has proved to be a tough competitor in the display space, over time, replacing South Korea as the largest producer of LCD displays, however much of that competitive success comes from the fact that the Chinese government has been a very substantial supporter of the Chinese display industry through subsidies that have covered both construction and operating expenses.  We do give credit to Chinese display manufacturers who have taken full advantage of said subsidies and used it to expand capacity when given the opportunity.  As the subsides reduce construction costs, therefore reducing interest costs on loans, reduce operating costs, along with a substantial lower wage base and cost of living, have given China’s display space the ability to outgrow and out-compete South Korea’s LCD display industry.
South Korea’s response, going back a number of years was to reduce its exposure to the generic LCD panel market and emphasize OLED displays and any product that might be considered ‘premium’ or even ‘non-generic’, which has helped Korea to maintain leadership status in the OLED display space.  The US however has no display manufacturing, although it is the world’s 2nd largest consumer (North America) of products that contain display panels (LCD or OLED), and while APAC consumes 54.7% of products with display panels, North America accounts for 22.9% of that market (2022), with Europe at 11.6%.  That said, we do not believe that the US is well suited to host generic LCD display manufacturing, given the salary and cost of living differential with China.

​While the US has made very significant attempts to curtail China’s semiconductor industry growth through onerous trade restrictions and licensing, as the US does not compete directly with China in the display space, there has been little effort by the US to step on China’s dominance of the display industry.  In fact, in July of 2018 the Trump administration targeted $34b worth of Chinese goods, including TVs, laptops, and smartphones, and in September of the same year added tariffs on an additional $160b in Chinese imports that pointedly expanded the range of tariffed CE products.  In January 2020 $120b of those tariffs ended with the signing of the Phase One Economic & Trade Agreement in January 2020.
More recently, there has been talk on Capitol Hill of restoring tariffs on TVs and possibly TV panels that are made in China and considering that China has ~57% of the world’s LCD display capacity, any new tariffs on LCD display panels would add to the price burden already imposed on consumers due to the rising prices of LCD panels themselves.  With ~80% of TV sets (global) produced in China, new tariffs on TV sets would have a similar, if not greater effect on CE prices.  Our issue is that there is no benefit to placing tariffs on Chinese LCD panels or TV sets other than from a political standpoint, and the US consumer will bare the burden of the fiscal cost.  Perhaps it will put the US in a stronger negotiating position with China that will potentially reap other benefits, but especially during a period of inflation and rising panel prices, it is hard to justify same, especially as the US has no generic LCD production industry.
Last year both houses of Congress passed legislation known as the American Competition Act of 2022, a bi-partisan bill that would allocate $250b over 5 years toward R&D, manufacturing, workforce development, and the development of a local supply chain, with a key provision being a 40% tax credit for investments in domestic manufacturing of advanced display technologies.  While the bill passed both houses, it was never enacted as the differences between the bills passed in the Senate and the House could not be ironed out, and the definition of advanced display technologies was left unspecified.   As tax credits are involved, it would eventually be up to the IRS to set the legal definition, but the bill still sits in committee as both sides try to come to terms on the details. 
It would seem more productive over the long-term to use the same subsidies that have been used in China (at least for construction), rather than the financial burdens imposed by new tariffs, but we are but lowly taxpayers and consumers who have little knowledge of the inner workings of the government, especially when compared to the career politicians that remind us regularly that “it’s not as easy as you think.”
Here's the relevant section of the Act:
Section 1002. Advanced Manufacturing Production Tax Credit.
(a) In general—Chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
(f) Advanced manufacturing production tax credit--
(1) In general—In the case of a taxpayer who manufactures an eligible component in the United States and sells the eligible component to an unrelated party, the taxpayer shall be allowed a credit against the tax imposed by this chapter in an amount equal to 40 percent of the cost of production of the eligible component.
(2) Eligible component—For purposes of this subsection, the term ‘eligible component’ means any component that is--
(A) manufactured in the United States.
(B) used in the production of an advanced display technology; and
(C) not manufactured in the United States by a related person of the taxpayer.